Just two days after its release at the beginning of January, the UK Royal Mint reported its supply of 2014 Sovereign gold coins had been completely bought out. After prices hit a 6-month low on December 31st, the mint pinpointed an “exceptional demand” for gold bullion coins – in particular the British Sovereign.
A demand which swallowed the initial 7,500 coins the Royal Mint intended to sell, after only two days. A further 7500 sovereign coins are expected to be released by the end of the week.
The Royal Mint isn’t alone in its struggle to keep up with demand. After the worst year for gold since 1981, significant price drops have drawn fresh demand for physical gold and attracted emerging markets in areas like China and Brazil.
There’s a particular demand for gold coins. And falling prices present an opportunity to snap up some bullion at a cheaper price. While global popularity for the British Sovereign left the UK Royal Mint without its flagship coin for almost a week.
“Since the dip in the price of gold we have seen increased demand for our gold bullion coins from the major coin markets, and this presently shows no sign of abating,” The Royal Mint said, following the shortage.
Which shows the mint isn’t expecting demand to relax any time soon making the Royal Mint’s initial issue of 7,500 individual 2014 Sovereigns especially modest. Although it’s quite normal for mints worldwide to increase or decrease production to suit demand.
The British Sovereign appeal
With over 1,000 years of history, the British Sovereign is the oldest surviving coin still in production. Every monarch since Henry VII has immortalised their portrait on the face of a Sovereign coin. A symbol of power and strength, the first Sovereigns were as much a propaganda tool as currency. And the British symbol has been making bold statements ever since.
During the First World War the sovereign paid for the nation’s war effort, with the government appealing to the public to donate their Sovereigns in the name of victory. “The British Sovereign will win!” read the poster campaign. Some £98million worth of Sovereigns collected by the Bank of England funded the nation’s military.
The Sovereign was designed to make an impression. But it was also forged with precision, an advanced process that defined its image of reliability and quality. Each coin is made of 22-carat gold and weighs exactly 7.9880g – the same weight and composition of all Sovereigns since the 1850s. It was the most accurate in the world, earning a global reputation that saw nations outside the British Empire adopt gold coin.
Eventually, the Sovereign went out of circulation during the First World War – never making its way back into the pockets of the general public. Instead, the Sovereign became a collector’s item and popular bullion investment. Never losing its global appeal, in 1957 the UK Royal Mint started producing British Sovereigns once again – due to extreme demand. Today it values the “one pound” coins at £450.